If you have more than $250,000 in a bank account, you might be wondering: “Is all of my money protected?” The answer depends on how your accounts are structured.
FDIC insurance is designed to protect your money if your bank fails, but it has limits—specifically, $250,000 per depositor, per insured bank, per account category.
However, with smart planning, you can increase your FDIC insurance coverage well beyond $250,000—keeping your savings safe and fully insured.
Let’s break down exactly how FDIC insurance works and the best strategies to maximize your coverage.
Understanding FDIC Insurance Limits
The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per insured bank, per account ownership category.
Here’s what that means:
✔ Each depositor (individual or business) gets $250,000 in protection.
✔ Each insured bank provides separate coverage.
✔ Each account ownership category (e.g., single, joint, business, trust) is insured separately.
🚨 Example of a potential problem:
- If you have $400,000 in a checking account at one bank, only $250,000 is insured, and you could lose $150,000 if the bank fails.
But don’t worry! There are several strategies to legally expand your FDIC insurance coverage beyond $250,000.
Top Ways to Maximize Your FDIC Insurance Coverage
✅ 1. Open Accounts at Multiple FDIC-Insured Banks
FDIC insurance applies per bank, so if you deposit money into different banks, you get separate coverage at each one.
✔ Example:
- You have $400,000 in a savings account at Bank A – Only $250,000 is insured 😬
- You move $200,000 to Bank B, keeping $200,000 at Bank A – Now both balances are fully insured 😊
This is the simplest way to increase your coverage without complicated account structuring.
✅ 2. Open Joint Accounts for Additional Coverage
A joint account (owned by two or more people) gets $250,000 in coverage per owner.
✔ Example:
- John and Sarah have a joint savings account with $500,000
- Because each account holder gets $250,000 in coverage, the full $500,000 is insured
If a third person (like a child or business partner) is added as an account holder, the total insured amount increases to $750,000 ($250K per owner).
✅ 3. Use Different Ownership Categories
FDIC insurance applies separately to different account types. You can increase your total coverage by spreading money across these categories:
| Account Type | Insured Coverage |
|---|---|
| Single Account (Personal Checking/Savings) | $250,000 per depositor |
| Joint Account (Two Owners) | $500,000 ($250K per owner) |
| Trust Account (Four Beneficiaries) | $1,000,000 ($250K per beneficiary) |
| Business Account (Separate from Personal) | $250,000 per business |
| Retirement Account (IRA/CDs in a Bank) | $250,000 per person |
🔹 Example: If you have a single checking account with $250,000 and a joint account with your spouse with $500,000, your total insured deposits at the same bank = $750,000.
✅ 4. Set Up a Revocable Trust for More Coverage
A revocable trust account can significantly increase your FDIC coverage, depending on the number of beneficiaries.
✔ How it works:
- FDIC insures $250,000 per beneficiary
- If you have a trust with four beneficiaries, your coverage increases to $1,000,000
- This applies per insured bank, so you can use multiple banks for even higher coverage
Trust accounts require careful structuring, so consult your bank or financial advisor to ensure they meet FDIC rules.
✅ 5. Open Business and Personal Accounts Separately
If you own a business, your business accounts qualify for separate FDIC coverage from your personal accounts.
✔ Example:
- John has $250,000 in his personal savings ✅ Fully insured
- John’s business has $250,000 in a business checking account ✅ Fully insured
- Even though both accounts are at the same bank, they are insured separately
🔹 Pro Tip: If you own multiple businesses, each business can receive separate $250,000 FDIC coverage.
✅ 6. Use a CDARS or IntraFi Network to Spread Deposits
Some banks participate in networks that automatically distribute your deposits across multiple FDIC-insured banks.
✔ Two popular services:
- CDARS (Certificate of Deposit Account Registry Service) – For CDs
- IntraFi Network – For savings and money market accounts
🔹 How it works:
- You deposit $1 million at one participating bank
- The bank spreads it across four other banks in $250,000 chunks
- You get $1 million in total FDIC insurance, but only deal with one bank
This is a great hands-off solution for people who don’t want to manage multiple banks themselves.
Final Thoughts: Keep Your Money Fully Protected
If you have over $250,000 in savings, you don’t have to risk losing money if your bank fails. With the right account structure, you can expand your FDIC coverage well beyond $250,000 and keep all your money safe.
Key Takeaways:
✅ Use multiple FDIC-insured banks for separate coverage
✅ Open joint accounts to double your coverage with a co-owner
✅ Use different ownership categories (single, joint, trust, business)
✅ Set up a revocable trust to insure $250K per beneficiary
✅ Separate business and personal accounts for additional coverage
✅ Consider CDARS or IntraFi to simplify large deposits
With smart planning, you can ensure that every dollar you save is protected—no matter what happens to your bank.